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"We're so relieved, we're happy," another Salinas Nob Hill employee, Al Garza, said. "Hopefully they'll be good days ahead and hopefully all our customers come back and shop here to help."

Nob Hill hired more than 500 replacement workers during the impasse. Union officials said they will be dismissed immediately.

Full details were not provided about the agreement involving Nob Hill, which has 128 stores in the region. However, the union said it was able to retain one of its most important benefits - a union-run health plan.

"This is an important accomplishment for our members and retirees," Jacques Loveall, president of UFCW 8-Golden State, and Ron Lind, president of UFCW Local 5, said in a joint statement. "We were able to address Raley's competitive concerns while protecting our membership in a very challenging time."

The grocery chain and UFCW returned to the bargaining table over the weekend in San Francisco after more than 7,500 workers went on strike on Nov. 4.

The two sides had been at odds over wages and benefits, including Nob Hill's proposal to eliminate health care benefits for retirees eligible for Medicare. Nob Hill officials had argued that they needed to cut costs in the face of a weak economy and competition from nonunionized companies such as Wal-Mart Stores Inc.

"As one of the last large family-owned grocery chains, it will be great to have everyone back working again," Nob Hill president Mike Teel said in a statement.

Teel said workers, customers and the company all suffered during the 10-day strike, the first in the 77-year history of the West Sacramento-based chain.

"So, it gives me great pleasure to know that as of today our employees will be back to work serving our customers with the same attention and care as we have always served our customers," he said.